Press Releases

December 09, 2016

Amid Ongoing Controversy, Palm Oil Giant Indofood’s Certifier Suspended

NGOs demand action from RSPO to formally suspend Indofood following documented cases of child labor, worker exploitation

FOR IMMEDIATE RELEASE

CONTACT: Emma Rae Lierley, Emma@ran.org, +1 425.281.1989 

San Francisco, CA - This week, Accreditation Services International (ASI), the accreditation body of the Roundtable on Sustainable Palm Oil (RSPO), the palm oil industry’s largest certification scheme, announced its decision to suspend the firm that certifies Indofood’s plantations, calling into question the validity of Indofood’s current sustainability certificate with the RSPO. Indofood is the largest private palm oil plantation company in Indonesia which has yet to adopt a commitment to responsibly produce palm oil and is a major joint venture partner of global snack food brands like PepsiCo.

The decision follows Rainforest Action Network (RAN), Indonesian labor rights advocacy organization OPPUK, and International Labor Rights Forum (ILRF)’s formal complaint lodged in October 2016 against Indofood with the RSPO. RAN, OPPUK, and ILRF are calling for the suspension of two of Indofood’s palm oil plantation subsidiaries––PT. PP London Sumatra Indonesia Tbk. (Lonsum) and PT. Salim Ivomas Pratama Tbk. (Salim Ivomas)––from the RSPO for egregious labor rights abuses that violate RSPO standards and Indonesian law.

Both an independent report and an assessment filed in September 2016 by ASI found Indofood to be in violation of the RSPO Principles & Criteria, as well as the RSPO Code of Conduct. Following these reports, in late November 2016, a compliance assessment was conducted by a certification body used by the RSPO, SAI Global, on one of the same Indofood plantations. SAI Global concluded most of the noncompliances to be resolved. However, in response to this assessment by SAI Global, Accreditation Services International (ASI), the body that oversees the performance of RSPO certification bodies, suspended SAI Global due to “Absence of evidence of effective corrective and preventive actions, allowing ASI to close a major nonconformity within the specified timeline”.

The SAI Global assessment presented unconvincing evidence of action taken by Indofood’s plantation subsidiaries to remedy issues, such as installing signboards and revising contracts. Many of the issues raised by RAN, OPPUK and ILRF in the complaint to the RSPO, including freedom of association, precarious employment of workers and a list of legal violations, were not addressed in SAI Global’s assessment as well.

“It is unacceptable that simply installing signboards that prohibit children and unregistered workers is considered adequate action to address the serious issues of child labor and undocumented kernet workers. It shows that RSPO’s certification bodies have very little understanding of these issues and that the plantation company will try to do as little as possible while ignoring the underlying drivers of these problems,” says Herwin Nasution, Executive Director of OPPUK. “The RSPO certification system needs an overhaul to address these systemic problems.”

ASI’s suspension of SAI Global casts serious doubt on the validity of Indofood’s current RSPO certificates and its claims to have addressed the labor rights violations that have been found in repeated audits and public reports.   

“This decision comes as no surprise to us. SAI Global is likely just one of many RSPO certification bodies which is ill-equipped to detect labor violations on palm oil plantations,” says Eric Gottwald, Senior Legal and Policy Director at the International Labor Rights Forum. “The evidence continues to pile up. The RSPO needs to take action now and suspend Indofood’s membership.”

Numerous Indofood buyers, joint venture partners, and financiers were called out in the report, “The Human Cost of Conflict Palm Oil: Indofood, PepsiCo’s Hidden Link to Worker Exploitation in Indonesia,” for relationships with Indofood, its plantation arm IndoAgri, and its parent company First Pacific. These include PepsiCo, Nestle, Unilever, Procter & Gamble, Musim Mas, Golden Agri Resources, and Wilmar; Japanese banks Sumitomo Mitsui Financial Group, Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ; European banks HSBC, Rabobank, Standard Chartered, BNP Paribas and Deutsche Bank; and US-based Citibank. PepsiCo in particular has been the target of a major public campaign related to Indofood as it released an updated palm oil policy in September 2015 which exempts Indofood from meeting the same responsible production standards set for PepsiCo’s other palm oil suppliers.

“Indofood buyers, business partners and investors now have increasing evidence and urgency to enforce their own policies by suspending relationships with Indofood,” said Gemma Tillack, Agribusiness Campaign Director with Rainforest Action Network (RAN). “Now is the time for joint venture partners like PepsiCo to use their business influence to move Indofood towards responsible palm oil production.”

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Rainforest Action Network runs hard-hitting campaigns to break North America’s fossil fuels addiction, protect endangered forests and Indigenous rights, and stop destructive investments around the world through education, grassroots organizing, and non-violent direct action. For more information, please visit: www.ran.org

The International Labor Rights Forum (ILRF) is a human rights advocacy organization dedicated to achieving just and humane conditions for workers worldwide. ILRF works with trade unions and community-based labor rights advocates to expose violations of workers’ rights, including child and forced labor, discrimination, and violations of workers’ rights to organize and bargain collectively.

OPPUK is an Indonesian labor organization founded in 2005 by student activists and workers concerned about palm oil workers’ working and living conditions in North Sumatra, Indonesia. OPPUK organizes and educates workers, conducts research and advocacy, and campaigns for the rights of palm oil workers in North Sumatra and Indonesia more broadly.

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